How is the FIRE movement doing?

[loutfard]

It's possible to trace this ~40 year cycle back to 1840. It's not centered on generations as much as major market/economic crashes: 2000, 1968, 1929, 1893, 1837.

Interesting to relate this cadence to earlier cycles like the biblical jubilee. David Graeber also touched this subject in his book "Debt: the first 5000 years". The wikipedia history of debt relief might also be interesting.

Debt relief cycles seem universal worldwide as an expression of economic cycles. More on topic, it might be interesting to explore the relation between ERE/FIRE/similar and economic/debt cycles.

[jacob]

There is more information available about FIRE, investing and alternative paths now than ever before and it comes in a variety of formats (books, blogs, forums, YouTube videos, podcasts). Investing and banking can be done simply on a phone or online. Employer retirement plans tend to have better options with lower expense ratios. You can get a 5%+ return on secure assets. The unemployment rate is near record lows and demographics are working in the favor of Millennials and Gen Z with a large number of boomers exiting the workforce. There are great options for lucrative careers without getting a four-year degree. There is more potential for geoarbitage than ever before. And... we basically have supercomputers available in our pockets at all times.

Yes and no. There's more information now, but does that translate into knowledge? There's also what I for lack of better words will call "anti-knowledge". I definitely "suffered" from anti-knowledge during most of my twenties: "The belief that finance and money was mainly for wannabe-suits, who do math on their fingers, and beneath wannabe-scientists, like myself, who do math in their head". As such I almost explicitly avoided making any effort towards learning about money.

Another kind of anti-knowledge is the victim/protest mentality that individuals can do nothing because "evil capitalism" and/or "it's selfish". I see that one a lot too. This is likely where the "FIRE is only for rich tech bros"-framing comes from. The popularity/media highlighting fatFIRE techbros isn't helping our image. I know that this is why some OGs are distancing themselves. Another reason is just that talking about FIRE long after the fact is kinda like talking about one's high school graduation decades later. There's only so much to say about "graduating HS" and it's not that personally interesting anymore.

I do get a vibe from some of the overly thread comments above (confirmed elsewhere) that geeking out on money is [still] not cool in the overall population. For example, Ramit Sethi seems to be doing roughly what he also did 15 years ago, that is, teaching young noobs, who start with zero knowledge (or anti-knowledge), some Adulting101 on how to open a bank account and use credit responsibly and deliberately and that having some plan/control of your spending is cool.

[Jin+Guice]

Someone said this earlier, but it seems like the thing about Gen Z is that they are people in their 20s doing what people in their 20s have done since at least the baby boomers (also see discussions of young people in the 1920s though). I've seen "Reality Bites" and similar complaints seem to be leveed at Gen X.

To me, it does seem slightly easier now to not be a corporate wage slave. The Affordable Care Act seems like it somewhat decoupled healthcare from jobs. As far as ERE, how is the cost of actual necessities like housing, food and head taxes vs. other goods and services, income, and investment income doing?

The "anti-knowledge" effect is really strong. I actually thought overcoming that might be what we were trying to do with ERE2 when I was asking a bunch of "what is ERE2?" questions, but it seems like it's not. It's also interesting bc FIRE and ERE are, in my opinion, some of the most subversive things that exist, but I seem to be the only person who holds this opinion. It's certainly not making either any cooler.

FIRE does have an image problem. Amongst my peers who are roughly ages 26-46, a large number have at least heard of FIRE but none of them think it's cool and no one is doing it to my knowledge. Work-to-consume consumerism is very popular even if one or more of its attributes are unpopular with almost every demographic. Consumerism and... I dunno even know what to call it... Jobism? rarely gets blamed.

I think it's also relatively hard to convince people of fringe cultural movements. For better or worse, the culture FIRE is associated with is tech bros and that is not appealing to most non tech bros, so if someone knows about FIRE and figures out you are talking about FIRE their heuristic switch will flip to "not interested."

The soft savings thing is interested. It's billed as caring about ones comfort vs savings for the future as this is assumed to bias "mental health" (according to the exactly 1 article I read). Another way to look at this is it prioritizes comfort spending as well as assuming a high economic discount rate (i.e. the future is strongly devalued for the present). Imo, in ERE world, this would bias semi-ERE as less work occurs today in exchange for more work in the future. Imo, ERE also assumes that one is most likely to maximize mental and physical health if one minimizes work.

[Scott 2]

Young people have never had more options to take an unconventional career path and find some level of financial success than they do today.

It takes a great deal more adaptability to exercise those options. The competition is higher than ever. It is accelerating with globalization, fewer natural resources, wealth consolidation and snowballing climate change.

I think the winners can do extremely well, but it is increasingly difficult to be a winner. Especially in the context of traditional FIRE.

Maybe more important - we've crossed an ecological tipping point. It's likely climate change means the natural world in 30-50 years looks dramatically different than today.

We've started to see the impacts recently - refugee crises, wild fires, deadly heat waves, etc. That's going to escalate. People will at the least, be forced indoors and into closer quarters. Likely much worse.

IMO the argument for delayed consumption is much weaker in that context. Especially if you don't believe you can out-compete. Thinking about the young people in my life - I'd endorse the soft saving strategy.

Traditional FIRE depends on a lot of assumptions I don't think will hold true over Gen Z's lifetime. There's place for fiscal responsibility, but austerity while your neighbors eat the last of the fish - I'm not sure that's rational.

As someone who's living the traditional FIRE lifestyle - it's good. But once the novelty wears off - freedom from doesn't really shift the happiness set point. It's freedom to that does so. The financial backing to pursue that, doesn't require FIRE. 3-5 years expenses is plenty. Better to combine that with youth, IMO. Leverage one's period of high fluid intelligence and aspire to something. Engage with the healthiest world you'll ever know.

[Hristo Botev]

Keep in mind that the stereotypical FIRE adherent is a knowledge worker and many of the MMM followers worked in careers with higher than median salaries like tech, finance, business, etc. Many now work from home, work a lot less hours than they used to, and in some cases get paid even more! . . . . Others like the balance and flexibility of WFH, so they are just going to continue along the same path. Unemployment has remained low which has given workers the most bargaining power in ~40 years. Why make the "sacrifice" for an early retirement when the current lifestyle is so great?

The above tracks my own trajectory perfectly:

• ~2015: BigLaw associate working 50-70 hour weeks with a long commute with my wife working full time as well and 2 kids in daycare and with all the big debts and big lifestyle inflation spending typical for the high income salaryman class --> discover MMM and start the long, painful process of cutting expenses and building savings

• 2016-2018: Make enough progress on the NW side to have enough FU money to leave the security of the BigLaw job for a new firm just started by a professional acquaintance, where I work about 500 hours less a year --> discover ERE at some point during that time

• 2018-2021: DW goes part-time; we make more progress on NW side that, thanks to a favorable labor market situation, puts me in a position to tell my law partners that I'm moving my family back home and that, while I'd like to keep working with them, I understand if they don't want to have to explain to the rest of the firm why Hristo is the only one allowed to work fully remote from another state --> my law partners decide to keep me around

• 2022-now: I work from home about 25 hours/week on average, getting paid more than I did while at BigLaw (though, honestly, now as much as I'd be getting paid at this point had I stayed in BigLaw) --> DW continues to work part-time (1 to 2 days/week) and is heavily involved with volunteering with all the kids' sports/school stuff, she is even coaching DD's middle school soccer team --> I like my clients and my current workload; the office politics is in some ways more challenging being remote then it was when I was in the office (the unknown leads to paranoia), but I also know that no matter what happens at work, we'll be fine and if I were to get fired tomorrow it'd just be the opportunity I've been waiting for to hang my own shingle

So, yeah, retirement at this point is not really appealing to me at all; it certainly doesn't have the appeal it did when I was working in BigLaw and hating life. Also, as nice as a paid off house and some money sitting in investment accounts are, I still see and likely will continue to see my best hedge against whatever the hell is going to hit us next as being continuing and expanding my professional competence, which one can only do by continuing to practice that profession. It's by no means full proof, but as someone with a wife and kids to support, early retirement is always going to take a back seat to financial security.

[7Wannabe5]

Another kind of anti-knowledge is the victim/protest mentality that individuals can do nothing because "evil capitalism" and/or "it's selfish". I see that one a lot too. This is likely where the "FIRE is only for rich tech bros"-framing comes from. The popularity/media highlighting fatFIRE techbros isn't helping our image... geeking out on money is [still] not cool in the overall population.

Yes, this is part of the problem. This is made especially clear by the fact that talking about gardening >>permaculture, nerding out about plants at the systems level, is thoroughly acceptable in almost all of society, at least in my experience. However, it's definitely not just the young Greens, who would describe capitalism as "evil/selfish" who are objecting to the "rich men north of Richmond." Just a maybe-thinning-line difference between focus on "evil" profits or "evil" taxation impacting the working stiff's paycheck/grocery bill. In my neck of the woods, I'm seeing more Barista/Militia solidarity among the economically struggling young, but MMV.

The basic goal of FIRE (as opposed to ERE) is to achieve as high of a ratio of Earn/Spend as possible. So, given the status of wealth in our culture, this is roughly analogous to promoting Chastity in a manner that gives advantage to the Most Sexy. As in "I only had sex 3X this year!", "Big deal! I only had sex 6X this year, even though I am 10X as sexy as you!"* So, it was bound to attract mostly the high earners. So, obviously, the reframing needs to be towards some easy to measure Quality of Life metric/Spending metric.


*Which, perhaps not coincidentally, is pretty much the reason I can't stomach born-to-power Marcus Aurelius bragging about his supreme stoic self-control as exhibited by not having sex with all 20 of his grandfather's concubines.

[Hristo Botev]

That being said, I don't think collecting easy money by leveraging an advantageous labor market is anti-ERE or anti-FIRE. I don't see it as that much different than leveraging an advantageous financial market. Personally, my job got a lot more tolerable/ lucrative after covid and as a result I work more. The magic of frugality is that it increases the value of money while decreasing the need for it.

If you actually WFH for an actual 20 hours a week for what was previously a 40+ hour a week paycheck, congrats, you are achieving the work portion of semi-ERE. If you aren't doing the frugality portion, then you're not really doing it, as frugality dominates everything else.

Seems to me the relationship with frugality is the difference between an ERE (and also Millionaire Next Door, YMOYL, MMM) mindset, on the one hand, vs. a Dave Ramsey or possibly Boglehead type mindset, on the other. For the latter, frugality is a suboptimal living situation that must be employed as a tool for a period of time in order to get to a point where frugality can be discarded forever. For the former, taken to the extreme frugality is itself the end, but the healthier view is one of detachment from material things and the freedom (both freedom from and freedom to) that comes with that detachment. So frugality isn't the end, rather it is just a beneficial side effect of the freedom that comes from detachment.

I'm not tied in to what the 20-somethings are doing, but through my wife (who has 20-something direct reports) the stories I get are more of the "'soft savings" type --> spend a summer working in the tourist industry so that you can save up enough to spend several months living it up in Bali or wherever until the money runs out, then rinse and repeat. Maybe that's not all that different from what I was up to in my 20s, with the Peace Corps and my other work to facilitate world travel. It's probably abnormal for someone in their 20s (regardless of the generation) to care too much about future savings unless and until they have children they have to take care of.

[jennypenny]

The soft savings thing is interested. It's billed as caring about ones comfort vs savings for the future as this is assumed to bias "mental health" (according to the exactly 1 article I read). Another way to look at this is it prioritizes comfort spending as well as assuming a high economic discount rate (i.e. the future is strongly devalued for the present). Imo, in ERE world, this would bias semi-ERE as less work occurs today in exchange for more work in the future. Imo, ERE also assumes that one is most likely to maximize mental and physical health if one minimizes work.

I dunno. I think I'd define it as 'well being' and not 'comfort.' The youngest cohort were hit pretty hard by covid, changing life trajectories, severing social ties, and missing out on (in some places) a couple of years of social rites and development. It also showed that many young adults (<30) benefit from more structure than they got during the pandemic. I don't think it's necessarily a bad thing for them to make mental health/health in general their primary goal for a while, even if that means more work over the course of their lifetimes.

I'll admit though that I'm more biased towards teaching them to build their own support systems that they can live with indefinitely rather than encouraging them to pursue FI hardcore. I don't assume there will be time later on to teach them what they'll need to know as society tumbles down the industrial staircase. Step 1 is solidifying 'well being' (zone 0).


@J&G -- not trying to pick a fight, just explaining how our viewpoints differ.

[Jin+Guice]

Am I mistaken that a strong assumption in ERE and even FIRE is that higher spending is not equivalent to a better lifestyle? Isn't the stated goal of ERE1 WL1-8 to live an equal or better quality of life by spending and working less and then building resiliency (and enjoyment) through skill acquisition?

For the former, taken to the extreme frugality is itself the end, but the healthier view is one of detachment from material things and the freedom (both freedom from and freedom to) that comes with that detachment. So frugality isn't the end, rather it is just a beneficial side effect of the freedom that comes from detachment.

Yes I agree, but this is also a forum where the bar is still set at spending under the U.S. poverty level of income, living on ~10% of your salary. Frugality is not necessarily austerity as much as recognizing the massive amounts of waste that happen in the first world and systematically eliminating it from your life. I argue this leads to a better lifestyle. I.e. detachment from possession where spending is not absolutely minimized is still likely to have one end up pretty low on the consumption possibility frontier currently offered in the first world.

I'm not 100% convinced that economic conditions are significantly worse than they were 15 years ago, but even if they are, maybe you can't ERE on minimum wage anymore (was anyone actually doing this?) and maybe it takes 2 years longer, but that still means one can ERE with the vast majority of jobs and now it takes 7 years instead of 5 or one has to work 7 hours a week forever instead of 5.

To me the genius of this whole thing is learning to live on less in preparation for the strong possibility of greatly reduced future economic opportunity while also increasing (or at least not decreasing) one's current lifestyle.

I think some strategic spending based on what may not be available 10-30 years from now is still in line with this mindset and I don't think someone who is detached from most possession would be unable to FIRE because of this.

I'm not tied in to what the 20-somethings are doing, but through my wife (who has 20-something direct reports) the stories I get are more of the "'soft savings" type --> spend a summer working in the tourist industry so that you can save up enough to spend several months living it up in Bali or wherever until the money runs out, then rinse and repeat.

Is this vastly different than the desired lifestyle of Sally Bowles, but with access to cheap air travel and the resulting geo-arbitrage?

I'll admit though that I'm more biased towards teaching them to build their own support systems that they can live with indefinitely rather than encouraging them to pursue FI hardcore. I don't assume there will be time later on to teach them what they'll need to know as society tumbles down the industrial staircase. Step 1 is solidifying 'well being' (zone 0).


@J&G -- not trying to pick a fight, just explaining how our viewpoints differ.

What? No! I am strongly strongly in favor of working more absolute hours over the course of a lifetime to reduce stress, smooth "leisure consumption" and build resiliency before FI. I don't understand why one wouldn't use the tools of reduced spending to work less almost immediately unless one likes their full-time job or has very strong (almost immediate) economic incentive to keep working (i.e. FI is <3 years away and equally compensated true PT work is not available and FT work is not that awful).

[ffj]

I have two kids in their twenties. One is a take charge kind of person and is always working on a PLAN, and the other complains how little they are paid for the work they are hired to do. One has aspirations of owning rental property and the other we can't get to even open a 401K with a company match to get that free money.

They were raised the same way. My wife and I are living examples to them that good decisions over time has a payoff. We have certainly been very forthright on good financial strategy. So why the difference? Personality, as far as I can tell. One is already planning for more freedom in their life and the other complains about the bleakness of ever owning a home or making good money.

Is that an answer to OP? I don't know about such a small sample size but I have a suspicion that todays climate isn't dramatically different from when I started out just that the challenges change with time, but so do solutions. I don't see anything insurmountable that a normal young person couldn't overcome, but I am also looking at it through an older persons lens, as well as someone who circumnavigated their own struggles at a young age. Anybody else here start out at $3.35/hour? That's twenty bucks after taxes for a full days work. I like to break that old chestnut out when the one kid complains about their hourly rate, haha, followed by why I didn't stay at $3.35/hour of course. A little bit of tough love followed by earned advice.

I've always wondered if you couldn't match personality type percentages to the people who FIRE/ERE? I bet there is a strong correlation regardless of the financial or political climate. Instead of wondering who is still playing the retirement game in 2023/2024 just research how many INTJ's, or their kissing MBTI cousins, there are in the world and extrapolate a standard deviation. I bet you could get close.

[7Wannabe5]

@ffj: That would be more in alignment with the non-existence of Free Will, but then what's even the point of this forum?

[Western Red Cedar]

Yes and no. There's more information now, but does that translate into knowledge? There's also what I for lack of better words will call "anti-knowledge".....

Another kind of anti-knowledge is the victim/protest mentality that individuals can do nothing because "evil capitalism" and/or "it's selfish". I see that one a lot too. This is likely where the "FIRE is only for rich tech bros"-framing comes from. The popularity/media highlighting fatFIRE techbros isn't helping our image. I know that this is why some OGs are distancing themselves. Another reason is just that talking about FIRE long after the fact is kinda like talking about one's high school graduation decades later. There's only so much to say about "graduating HS" and it's not that personally interesting anymore.

I think it is fair to assume that someone needs to act on information or do something with it to develop knowledge. The fact that more information exists and it is readily available, in more than one or two formats, generally makes things easier.

YouTube alone is an incredibly powerful tool that has made DIY projects and skill acquisition much easier. I initially tried to learn guitar from a chord book and a music book I bought at my local music store. Now I have the option to learn through video, for free, from a variety of professional musicians or instructors, from almost any location. I can also record myself and with an app on my phone or computer. The mere fact that information exists doesn't magically make me a better musician, but it certainly is easier to learn.

In regards to the influence of anti-knowledge, I'm not entirely sure whether the noise associated with anti-knowledge offsets the large amount of information in the personal finance space. It is certainly easy to get lost in the noise, and I was personally influenced by the victim/protest mentality in my twenties. I'd like to think that if a relatively intelligent person wanted to develop a knowledge base around personal finance, they could break through the anti-knowledge without too much effort.

I agree that after a while talking about FIRE isn't particularly interesting. A lot of the OGs moved on or pivoted after losing interest or finding something else to focus on.

[Western Red Cedar]

Traditional FIRE depends on a lot of assumptions I don't think will hold true over Gen Z's lifetime. There's place for fiscal responsibility, but austerity while your neighbors eat the last of the fish - I'm not sure that's rational.

As someone who's living the traditional FIRE lifestyle - it's good. But once the novelty wears off - freedom from doesn't really shift the happiness set point. It's freedom to that does so. The financial backing to pursue that, doesn't require FIRE. 3-5 years expenses is plenty. Better to combine that with youth, IMO. Leverage one's period of high fluid intelligence and aspire to something. Engage with the healthiest world you'll ever know.

Saving 25x expenses so one never needs to work again is a pretty radical idea. Putting aside assumptions about markets and climate change impacts, simply telling someone "all you need to do is work 7-15 years then you can quit to do whatever you want" isn't necessarily going to carry a lot of weight. They will probably prefer to work for a while, save some money and do what they want much sooner.

Some of the discussions and critiques of FIRE among Gen Z I've seen discussed elsewhere mirror some of the critiques I've seen on this forum. Here is one of my favorites from @BSOG: viewtopic.php?p=194073#p194073

I think it is healthy to challenge assumptions with the FIRE model. I'll be leaving my job before I hit my number to pursue "freedom to" opportunities.

[Scott 2]

Am I mistaken that a strong assumption in ERE and even FIRE is that higher spending is not equivalent to a better lifestyle?

I think that's true of ERE and MMM riffed on it. I see it as a deviation from traditional FIRE. The drift of the MMM forums towards higher spending reflects this. It is not unique.

The changed happened at Bogleheads and earlyretirement.org as well. Most recently - anyone retiring in the 2009-2014 timeframe experienced dramatic financial growth. Some are on a runaway path. They are spending it.

I think ERE is an effective strategy to navigate the uncertain future. However, it's tangential to the FIRE movement at this point, especially with the ERE2 shift.

Note too that early retirement originally meant one's mid 50's. The reframing to 40 (MMM) or 30 (ERE) is more recent. Early FIRE was much more into frugality as a means.

My own spending is in the lean fire range. If my wealth doubled, I'd buy more quality of life. It's not that I don't understand the other paths. I find money a useful tool.

I've flirted with going the other direction. Relieving austerity through skill development. It hurts. Maybe the pain eventually yields equal or greater pleasure, but it's a hard path. Walking it takes a special person, especially sharing it with a life partner.

[Hristo Botev]

FWIW, some recent stories from the past week or so related to the FIRE world:

1. The trailer park millionaire: https://www.afr.com/world/north-america ... 122-p5elsn

2. Dave Ramsey getting trolled about the 4% rule by this guy: https://www.youtube.com/watch?v=BugfOEGzG0Y

[ffj]

@ffj: That would be more in alignment with the non-existence of Free Will, but then what's even the point of this forum?

Ha! That's a whole can of worms probably best not opened. Imagine that thread.

@Hristo

Dave Ramsey has turned into an unbending grouchy old shit. I would even say a bully. He has surrounded himself with a bunch of yes men/women including his daughter. Which is a shame as he still has great advice for the less financial sophisticated among us, but man he's almost impossible to listen to anymore.

[7Wannabe5]

It's also interesting bc FIRE and ERE are, in my opinion, some of the most subversive things that exist, but I seem to be the only person who holds this opinion.

ERE subversive, absolutely. FIRE, not so much. Unless you think that Vanguard being the majority shareholder of over 2/3 of the increasingly huge and monopolistic firms in the market is indicative of a trend that is going to lead to something fantastic for all the punk kids. What would be more subversive, IMO, would be opening up all sorts of black market free trade towards personal income. DIY the market! F*ck Vanguard! Be the vanguard!

The Bloated Elephant in the Room

[loutfard]

In regards to the influence of anti-knowledge, I'm not entirely sure whether the noise associated with anti-knowledge offsets the large amount of information in the personal finance space. It is certainly easy to get lost in the noise, and I was personally influenced by the victim/protest mentality in my twenties. I'd like to think that if a relatively intelligent person wanted to develop a knowledge base around personal finance, they could break through the anti-knowledge without too much effort.

Thirty years ago, one got information bombed. Now, one has to make a conscious effort not to get bombed by the information equivalent of drones and guided bombs.

[Slevin]

Note too that early retirement originally meant one's mid 50's. The reframing to 40 (MMM) or 30 (ERE) is more recent. Early FIRE was much more into frugality as a means.

Side note: do we actually have any EREs at / before 30, especially without being in an ultra high paid field? @white belt or @c40 maybe? I'm wondering if even in the group about doing the thing any youngster has the inclination / discipline to fully execute FI by 30.

[7Wannabe5]

@Slevin: I think maybe a couple of the crypto kids.